What is Georgia Senate Bill 406?
The detrimental provisions in Senate Bill 406 mirror similar legislation in other states, treating HOAs like state-controlled entities rather than private communities. Georgia has always treated associations as private, contract-based, and locally governed. This bill represents a major shift, making it more difficult to recruit volunteer board members, leading to higher costs, lawsuits, and unintended harm.
As written, SB 406 will:
- Raise costs on all homeowners within communities
- Weaken an association’s ability to maintain communities
- Impose duplicative obligations on volunteer community association board members
- Override long-standing private contracts
- Lead to lawsuits that will need to be funded by homeowners like you
Georgia law currently requires all community associations to register annually with the Secretary of State. SB 406 would establish a duplicate registration system requiring some community associations to register a second time, adding costs and creating widespread confusion. The bill also creates a complaints board with investigatory responsibilities but little authority to solve normal HOA disputes. It also lacks critical information about what this will cost or who will pay for it.
Senate Bill 406 also allows the state to limit or stop assessments, fees, liens, and foreclosures. Allowing the state to change association obligations breaks contracts, likely considered unconstitutional, and almost guarantees lawsuits ultimately paid for by homeowners.
Senate Bill 406 imposes a $4,000 minimum for an association to initiate foreclosure. This provision will dilute the only serious enforcement tool associations have to collect on unpaid assessments, shifting the burden to those homeowners who do pay. Associations have real financial obligations, and when delinquencies grow, they can make it difficult to pay for statutory and contractual obligations like insurance, utilities, and amenity maintenance. Finally, amendments added by the House Judiciary Committee interfere with a homeowners association's ability to collect attorney's fees in cases where action must be taken to enforce the rules and regulations of the association. The unintended consequence of this legislative action will be increased costs on homeowners, not the cost savings that legislators envision.
Please act now. Urge your Georgia state House members to OPPOSE Senate Bill 406 and protect Georgia’s community associations.
Georgia Legislative Action Committee
Work alongside our Georgia Legislative Action Committee this legislative session to educate lawmakers on the harmful impacts that this legislation will have on community associations across the Peach State.